Acceptance Market (International) - Explained
What is an Acceptance Market?
Written by J. Mance Gordon
Updated at April 19th, 2024
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What is an Acceptance Market?
An "acceptance" is a financial instruction (generally time draft or bill of exchange) that is used to make payment in the international trade of goods.
An acceptance market is used in the international sale of goods. The buyer agrees to pay the seller at a future date by signing the acceptance document. The Seller then takes the acceptance and sells it to a financial institution. The financial institution will receive payment at the future date.
The scenario gives the buyer time to receive and sell the product to pay the acceptance. Selling the acceptance gives the seller additional liquidity at an earlier date.